Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q3 2022 Earnings Presentation
24 slides from Oaktree Specialty Lending's earnings presentation, Aug 4, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
third quarter 2022 earnings presentation august 4, 2022 nasdaq: ocsl
Slide 2: Forward Looking Statements & Legal Disclosures
Forward Looking Statements & Legal Disclosures Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements
Slide 3: Highlights for the Quarter Ended June 30, 2022
Highlights for the Quarter Ended June 30, 2022 • $0.17 per share as compared with $0.18 per share for the quarter ended March 31, 2022 adjusted net • GAAP net investment income was $0.22 per share, unchanged from $0.22 per share for the quarter ended March 31, 2022 investment income1 • The slight de
Slide 4: Portfolio Summary
Portfolio Summary portfolio characteristics portfolio composition (At fair value) (As % of total portfolio at fair value; $ in millions) 4% 2% 7% First Lien – $1,796 $2.6bn 151 Second Lien – $426 total investments portfolio companies 17% Unsecured – $64 Equity – $110 70% Joint Ventures – $170 9.3% $
Slide 5: Portfolio Diversity
Portfolio Diversity diversity by investment size portfolio by industry1 (As % of total portfolio at fair value) (As % of total portfolio at fair value) Industry % of Portfolio Joint Ventures 7% Software 16.2% Top 10 Investments IT Services 6.9 19% Pharmaceuticals 4.7 Specialty Retail 4.2 Biotechnolo
Slide 6: Investment Activity
Investment Activity new investment highlights historical funded originations and exits ($ in millions) $500 $416 400 $132mm $130mm 300 $202 $241 $235 $236 new investment new investment $165 $171 $180 200 $130 $130 commitments fundings1 100 0 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 New Funded Invest
Slide 7: Investment Activity (continued)
Investment Activity (continued) new investment commitment detail ($ in millions) Security Type Market Investment Number of Unsecured & Private Primary Secondary Avg. Secondary Fiscal Quarter Commitments Deals First Lien Second Lien Other Placement (Public) (Public) Purchase Price 2Q2020 $273 39 $210
Slide 8: Investing In Response to Changing Market Conditions
Investing In Response to Changing Market Conditions investment commitments: public vs. privates $160 110% 140 100% 120 100 90% ($ in Millions) (Weighed Average Price) 80 80% 60 40 $75 $63 70% 20 $40 $35 $22 $2 $10 $2 0 $5 60% 3/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 12/
Slide 9: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 GAAP Net Investment Income per Share $0.22 $0.22 $0.18 $0.18 $0.20 Adjusted Net Investment Income per Share1 $0.17 $0.18 $0.17 $0.16 $0.19 Net Realized and Un
Slide 10: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Investments at Fair Value $2,565,389 $2,644,775 $2,558,623 $2,556,629 $2,339,301 Number of Portfolio Companies 151 146 140 138 135 Average Portfolio Company Debt Investment Size $16,700 $17,
Slide 11: Investment Activity
Investment Activity As of ($ in thousands) 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 New Investment Commitments $131,900 $227,900 $299,900 $385,000 $178,400 New Funded Investment Activity1 $130,000 $236,200 $240,800 $416,400 $165,300 Proceeds from Prepayments, Exits, Other Paydowns and Sale
Slide 12: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge adjusted net realized and unrealized adjusted nii gains (losses), net of taxes $8.00 $0.17 ($0.41) ($0.01) ($0.04) 7.50 $0.22 ($0.47) $0.04 $0.05 $0.01 ($0.165) 7.00 6.50 6.00 $7.26 5.50 $6.89 $6.89 5.00 4.50 4.00 3/31/22 NAV GAAP Net Interest Income Part II Incentiv
Slide 13: Capital Structure Overview
Capital Structure Overview funding sources ($ in millions) 0.90x to 1.25x Principal target leverage ratio Committed Outstanding Interest Rate Maturity Syndicated Credit Facility $1,000 $575 LIBOR + 2.00% 5/4/2026 Citibank Facility 200 170 LIBOR + 1.25%-2.25%1 11/18/2024 Investment 2025 Notes 300 300
Slide 14: Funding and Liquidity Metrics
Funding and Liquidity Metrics leverage utilization liquidity overview ($ in millions) ($ in millions) $2,000 $1,850 $1,850 $1,850 9/30/2021 12/31/2021 3/31/2022 6/30/2022 1,800 $1,750 Credit Facilities Committed $1,100 $1,200 $1,200 $1,200 1,600 $455 $455 $550 $470 Credit Facilities Drawn (630) (650
Slide 15: Strategic Joint Ventures are Accretive to Earnings
Strategic Joint Ventures are Accretive to Earnings ocsl’s joint ventures are income-enhancing vehicles that primarily invest in senior secured loans of middle market companies and other corporate debt securities Key Attributes of Joint Ventures: • Equity ownership: 87.5% OCSL and 12.5% joint venture
Slide 16: Compelling Performance Under Oaktree Management
Compelling Performance Under Oaktree Management nav and cumulative distributions paid per share $10.00 9.00 $1.71 $1.87 8.00 $1.55 $1.41 $2.03 $1.28 $1.16 7.00 $0.56 $0.66 $0.75 $1.05 $0.47 $0.94 $0.18 $0.37 $0.09 $0.28 6.00 $0.85 5.00 $7.09 $7.22 $7.28 $7.34 $7.26 4.00 $6.85 $6.89 $6.55 $6.60 $6.60
Slide 17: Strong Earnings and Dividend Growth
Strong Earnings and Dividend Growth adjusted net investment income per share and roe dividends declared per share ($ in millions) ($ in millions) 1 10% increase from September 30, 2021 9.5% LTM return on adjusted NII $0.20 $0.18 $0.170 $0.18 $0.165 $0.17 $0.160 0.18 $0.17 0.16 $0.155 $0.16 0.16 0.14
Slide 18: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity 1 2 3 4 continue rotating into positioned for operate within new optimize higher-yielding rising interest rates target leverage range joint ventures investments • 88% of the portfolio at fair • Revised target debt to • Opportunity to improve the • Opportuni
Slide 19: Appendix
OCSL | Specialty Lending Corporation
Slide 20: Non-Core Investment Portfolio Detail
Non-Core Investment Portfolio Detail non-core investment portfolio characteristics non-core portfolio composition (At fair value; $ in millions) debt investments $120 • $38 million at fair value in two companies 100 $77 • Received a $7 million paydown on one investment during the 80 quarter ended Ju
Slide 21: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended ($ in thousands) 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 investment income Interest income $54,728 $57,019 $55,450 $55,094 $51,999 PIK interest income 5,178 4,674 4,663 4,960 4,597 Fee income 2,275 1,905 912 645 7,823 Dividend i
Slide 22: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended ($ in thousands, except per share amounts) 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) $(86,755) $(27,038) $(4,586) $(2,098) $3,917 Ne
Slide 23: Non-GAAP Disclosures
Non-GAAP Disclosures On March 19, 2021, the Company completed the Merger. The Merger was accounted for as an asset acquisition in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations—Related Issues ("ASC 805"). The consideration paid to OCSI’s s
Slide 24: Contact Us
contact us: visit us: Investor Relations oaktreespecialtylending.com Michael Mosticchio (212) 284-1900 ocsl-ir@oaktreecapital.com
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